Companies as diverse as multinational Konica Minolta and local startup Kirrikin are operating as both for-profit and for-purpose businesses.
Finance executive Daniel Madhavan had an eye-opening experience when he spent some time volunteering at Foundation for Young Australians.
“I had never really thought about using business for anything other than profit,” the former Goldman Sachs executive recalled.
Speaking at the Social Impact Festival at the University of Western Australia this month, Mr Madhavan said he met an amazing group of young social entrepreneurs at the Melbourne-based foundation.
“Many were building incredibly exciting ventures, and some have gone on to be very successful,” he said.
“That was a moment that was not just confrontational for me but a moment of insight – the idea that I could blend my interest in social change with my business skills.”
Daniel Madhavan manages nearly $1 billion through Impact Investment Group.
Mr Madhavan is now chief executive of Impact Investment Group, which manages just under $1 billion on behalf of 350 families and a handful of institutions, across property, renewable energy and venture capital.
It practises Mr Madhavan’s focus on blending financial returns with social impact.
“In all three of those areas, there must be a measurable social and environmental benefit,” Mr Madhavan said.
“I’ve always believed it’s absolutely beneficial for a company to work with society, to give to society outside the core business of generating profit for shareholders,” Mr Cooke said.
“It’s a rather controversial statement, a lot of people don’t like it, but essentially what I’m saying can be reduced to a few letters.
“There is a very strong ROI in CSR.”
Translated, he says there is a strong return on investment from corporate social responsibility.
“It’s not always just altruistic, it’s a virtuous circle,” Mr Cooke said.
“I’m a very pragmatic person; I just want companies to give more, and I don’t mind if the company benefits along the way.”
He said he implemented these ideas by surveying the company’s Australian staff, which has grown from 400 to 500 since he took over.
Two responses overwhelmingly stood out from the initial surveys – staff wanted better communication and more purpose.
“I went back and asked all our people what that looked like,” Mr Cooke said.
“One thing they asked was for us to form partnerships with not-for-profit organisations and support them with cash, technology, volunteering, workshops, pro-bono expertise.”
The staff selected a handful of charities to support, including Breast Cancer Network, Landcare and The Smith Family.
Other activities include advocacy for anti-slavery and anti-child labour causes.
Mr Cooke believes he has a much more engaged and committed workforce and insists this activity delivers bottom-line results.
“I believe I could look any shareholder in the eye and talk about the work we do in the community as not only benefiting the community but also the company,” he said.
“There is absolutely tangible evidence of that.”
For instance, he said the local business was defying the slowdown in printer sales.
“The interesting thing is that, in Australia, Konica Minolta is not declining in its sales by 5 per cent a year, it’s growing by 5 per cent,” Mr Cooke said.
“I go to new customers; these are big businesses that haven’t spent a dollar with us for 40 years but are now leaving their current supplier and giving us all their business.
“Invariably they all say pretty much the same thing.”
Mr Cooke said the key point of difference was that customers wanted to be aligned with Konica’s values and the work it was doing in the community.”
The activities undertaken in Australia are not in isolation.
Konica Minolta has been named an Industry Group Leader on the Dow Jones Sustainability World Index, a global index focused on the sustainability and ethical impact of companies.
Konica Minolta was one of 24 companies to be named an industry leader and the only Japanese company to be given this title.
Kirrikin digitally prints Aboriginal artwork onto cashmeres and silks, turning them into scarves and ties that are sold internationally.
The idea for Kirrikin came from her personal experience as an Aboriginal woman.
“One thing that drove me insane was not being able to find a scarf that represented who I was and where I came from,” Ms Healy said.
She said Kirrikin was just an idea until she started talking to the artists, who now share the profits from the business.
“We made a deliberate effort to go high end and present some beautiful cashmeres and silks because it is well beyond time that our people and our art were honoured for what they really are, the depth and beauty of our culture,” Ms Healy said.
In 2016, Ms Healy extended the program to assist Aboriginal women in prison.
“I fund art materials and art programs to make their lives a bit more interesting and varied and give them access to external people while they are in jail,” she said.
“That’s why I’ve developed a second business,” she said.
Warrikal is a mechanical maintenance business that has partnered with the Wirrpanda Foundation to provide training and work opportunities for indigenous people.
“Our business model, in itself, is sustainable,” she said.
“We don’t have shareholders, we have customers and we’re focused on them, they are our owners, in return we support their communities.”
Ms Carroll said Beyond Bank had a very philanthropic approach when its community division was established.
“It was about donations and grants,” she said.
“We started with about $50 million; within about four years, through a shared-value approach, by partnering with community organisations, we’ve grown our portfolio to $400 million.
“That shows business can do well and do good.”
Kate Carroll says B Corp certification enables Beyond Bank to measure its impact.
Both Impact Investment Group and Beyond Bank have obtained B Corp certification.
Ms Carroll said that enabled the bank to measure impact on staff, the community, the environment, customers, and governance.
This year’s Social Impact Festival included the third pitch event held by Impact Seed, a WA-based organisation focused on social enterprises.
Six social entrepreneurs pitched for early stage investment from a panel of potential investors and partners.
The program aims to help schools reduce their carbon footprint and encourage energy saving behaviour from a young age.
To boost the sector, Impact Seed has partnered with social impact crowdfunding platform StartSomeGood.com and the City of Perth to run Pitch for Good Perth.
To be held in October at Perth Town Hall, it will be the first live social impact crowdfunding event in WA.
Meanwhile, a report launched this month by the Responsible Investment Association Australasia (RIAA) in partnership with the Centre for Social Impact at Swinburne University found investments that deliver positive social and environmental impact alongside a financial return are on the rise.
Benchmarking Impact: Australian Impact Investment Activity and Performance Report 2018 found 51 Australian ‘impact’ investment products active at December 31 2017, with a value of $5.8 billion, up from $1.2 billion at 30 June 2015.
The main investment categories were green bonds, property and infrastructure.